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Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 11.1
Chapter 11
ACCOUNTING INFORMATION SYSTEMS AND BUSINESS
PROCESSES:
PART II
Discussion Questions
11-1. Four data items that both payroll and personnel would use are: employee number (or
code, and information about deductions.
11-2. Payroll transactions for processing involves essentially the same steps for each
confidentiality.
11-3. Data items likely to be added when inputting a new raw materials inventory item
rate. In both these examples, there are other data items that an AIS may capture, depending on
11-4. Nonfinancial information that an AIS might capture about a manufacturing firm’s
amount of time needed to produce a product or each product component. AISs tend to focus on
business organization.
11-5. The basic concepts are a commitment to eliminate waste, simplify procedures and
continuous improvement efforts
(http://www.1000ventures.com/business_guide/lean_production_main.html). The concepts that
improvement.
11-6. AIM Industries, a metal stamping company, located in Grand Haven, MI has been in
business for over 40 years. Jeanne Duthler had 10 employees when she bought the plant in 1984.
SM 11.2
numbers dollar wise as they did last year, but showing more profit as a result of lean
manufacturing. For 2007, the company expected to increase profitability by 10%.
Lean practices at AIM include:
Consolidating production steps
For more examples, see Karen Kroll, “The Lowdown on Lean Accounting,” The Journal of
Accountancy (July 2004), pp. 69-76.
11-7. For examples, see Karen Kroll, “The Lowdown on Lean Accounting,” The Journal of
Accountancy (July 2004), pp. 69-76.
11-8. Both homebuilders and cement companies have information needs related to their
and output data to calculate costs for specific quantities. This distinction is likely to impact the
11-9. This chapter discussed AISs for the professional services, health care, and not-for-
profit industries. Some students feel that “the absence of merchandise inventory” is the unique
quality goals for its intangible products. These difficulties can cause various negligence suits
against service organizations.
issue for the insurance industry is fraud. The banking industry must deal with check clearing,
credit ratings and credit histories, as well as information about financial markets. The
and can include MRP II and/or ERP capabilities (input technologies might also be used, such as
RFIDs and bar codes). The hospitality industry includes restaurants and hotels and so its
SM 11.3
governmental accounting standards. These are just a few of the issues you might discuss relative
to these industries.
11-10. Students might locate a number of different software solutions for this discussion
question. For example, we selected Medflow Complete, an ophthalmology practice management
solution: http://www.medflowcomplete.com/ophthalmology-practice-management/. This
Billing
Refunds Module
11-11. To ensure that a business reengineering effort is successful, managers will want to
“champion” the effort. This means obtaining a buy in from employees and showing unwavering
costs that may be incurred. The cost of reengineering can be high. Several good reference articles
on this topic are:
14.
“Change Champions,” J. Berk, The Internal Auditor, April 2006, pp.64-68.
“Get Ready: The Rules are Changing,” K. Melymuka, Computerworld, June 13, 2005, p. 38.
Accounting Quarterly, Summer 2005, pp.10-18.
Problems
11-12. This question requires students to do some outside research. It is useful for students since
it helps them to understand how industries vary in their accounting information needs. Students
spreadsheets and databases. They may also learn that many of the organizations use very specific
programs. For instance, a student who looks at catering firms might learn about catering software
magazines/journals.
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 11.4
associated with software for each industry. For example, the following web sites offer information
on software for dentists to manage their practice:
http://www.dentrix.com
http://gbsystems.com/os96i.htm
http://www.dentalexec.com/dental-exec
11-13. As you might imagine there are a wide variety of choices that students might identify for
this problem. The important point to make with the students is that the solution should match the
conducted.
However, the following are a representative sampling of the choices available:
ZPay Payroll Systems offers technical support, tutorials, and a free 30-day trial
(http://www.zpay.com/)
11-14. Adoption of EMR or electronic medical records by physicians, healthcare organizations
and their related business associates is becoming a fact. As part of the American Recovery and
Reinvestment Act of 2009, physicians can receive up to $44,000 in Medicare incentive payments
beginning in 2011 for implementing EMR systems. Physicians must be able to demonstrate
until end of 2014 to meet Stage 2.
Source: Electronic Medical Records Deadline: Penalties For Not Using EMR?
http://www.medicalrecords.com/physicians/electronic-medical-records-deadline#ixzz2tQlpazuY
The Allegiance MD software solution is "meaningful use" Stage 2 certified, and may be run on any
operating system and on an iPad. The standard features for this software include the following:
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
Electronic Medical Record
E-Prescription
Evidence-based clinical knowledge
E-Lab
E-Fax
Automated Transcriptionist
Advanced Scheduling
Electronic Appointment Reminder
Patient Portal
Medical Billing Software
Electronic Statement
Electronic Eligibility
Electronic Claims & Remittance
Claim Scrubbing
Electronic Remittance Advice (E-Post)
Dashboard
Artificial Intelligence
Certified HIPAA Secure
11-15. An automated billing system could help this firm in several ways. First, by investing in
in-house time and billing software, it may be possible to significantly reduce the expense associated
An automated system will be able to analyze data in many different ways. Each lawyer's billable
hours can be computed and compared for various periods, for example. Productivity reports and
time for individuals.
Lawyers who use computers may record time spent on a client's work in the following way. Every
time the lawyer logs into a particular file, software can keep track of the time the file is in use.
Alternatively, a professional might keep track of time in an on-line organizer. As the individual
SM 11.6
Features include: Time & billing (tracks billable time; some programs create reports for
individual billing; stopwatch feature accurately times tasks; billable time can be recorded on an
others.
Case Analyses
11-16. Hammaker Manufacturing I (AIS for New Manufacturing Firm)
1. Many companies are turning to an AIS or ERP to help them better manage inventory.
logistics tools can help to manage inventories by considering variables such as lead times,
delivery schedules, routing, safety stocks, and others.
2. There are many data elements that the system may include about inventory items. Vendor,
delivery time, safety stock, lead times, and average order size are a few of them. As an example
promotions (remember when McDonald’s ran out of beanie babies?). Delivery times can be
very tight. For example, a store may want frozen goods delivered each Tuesday between noon
special needs of this particular business.
1. Students might select any of the documentation tools identified in Chapter 5 (flowcharts,
first.
2. Students might locate a variety of sources that list reasons for outsourcing. The Introduction
SM 11.7
we outsource the accounting function, then we might be able to better use the talents of the staff
accountants in analyzing other business opportunities, analyzing and improving business
processes, etc. So we could use our human capital in endeavors more directly related to our
core processes.
one or several of these processes have been identified as possible candidates for outsourcing, we
would then ask: Which of these processes are core to our business?
Of course, in the effort to examine each of these processes, Dick might want his employees to
3. We would probably all agree that producing automotive parts is a core business process for
competitors’ products.
4. The answer is yes, businesses do sometimes outsource what we would call core processes. A
number of examples may be cited here. Probably the best known example is Nike. This
insurance companies.
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 11.8
5. Most likely any business decision that displaces employees will have social and legal
implications. Socially responsible organizations are typically admired by the community and
other firms? At what cost? These are all important questions that should be asked.
Regarding legal implications, we need to know if the company employees are represented by a
long-term lease? The lease contract might have certain penalties for breaking the contract if the
facilities are no longer needed.
6. This is certainly a case that has many facets and interesting possibilities. Unfortunately, we
be advantageous to Hammaker.
1. To adopt lean production, HMC would probably want to focus on the five principles of lean
thinking that are identified in an article in Strategic Finance, May 2007 (How do your
would need to rethink how they collect data for decision making.
Flow and Pull: In a lean enterprise the customer order triggers or pulls production. This
information and to take necessary actions.
Perfection: Lean enterprises seek perfection, defined as 100% quality flowing in an
unbroken flow at the pull of the customer. HMC is already committed to quality products so
2. Firms that implement lean production concepts typically benefit in the following ways:
Waste reduction
Production cost reduction
SM 11.9
Labor reduction
Inventory reduction
Production capacity increase
Employee involvement and empowerment (multi-skilled workforce)
Higher quality products
3. Denise and her financial analysts might gain the following benefits from attending a Lean
Accounting Summit:
Learn cutting-edge thoughts and ideas
Identify companies to benchmark these concepts
